Strategy spent nearly nine times as much last week buying back its own preferred stock as it did buying Bitcoin. The company put $192.4 million into repurchasing its STRC preferred shares and $21.5 million into 250 BTC, it said on Monday.
That ratio is the story here. A company built around stacking Bitcoin is now putting most of its weekly spending into its own capital structure.
The buyback is the bigger number
Strategy repurchased 1,932,145 shares of STRC, its variable-rate Stretch preferred stock. That leaves $354.8 million available under its program to buy back preferred shares.
The week before, the pattern looked about the same. Strategy bought $29 million in Bitcoin and repurchased $176 million of STRC as it posted a $21 billion third-quarter gain.
A record stack, bought at a higher price
The 250 BTC were bought between October 5 and October 11 at an average of $86,194 per Bitcoin including fees, according to the company’s release. Strategy now holds 848,250 BTC, a new record.
The full stack cost a total of $64 billion, at an average of $75,444 per coin. So this latest batch went in at more than $10,000 per coin above the company’s lifetime average.
Funding came almost entirely from common shareholders. Strategy raised $21 million by selling about 125,000 shares of its MSTR common stock through its at-the-market offering program and covered the remaining $500,000 with cash. It sold no preferred stock during the week.
Billions sitting in dollars
As of October 11, Strategy held $4.88 billion in a U.S. dollar reserve set aside for preferred dividends and debt interest. It also held $640.5 million in cash for broader purposes, such as buying Bitcoin.
The USD reserve started out with $1.44 billion. Strategy set up the separate cash pot later, after raising $2 billion by selling MSTR stock.
The company has also proposed that its preferred stock dividends accrue 365 days a year. And it has said it could sell up to $1.25 billion of Bitcoin under its digital credit capital framework.
Selling is on the table
That last point would have sounded strange coming from this company a few years ago. But Strategy CEO Phong Le defended selling Bitcoin as the “right trade” in September. Weeks later, the firm set a new holdings record at the end of the month with a $143 million purchase.
Bettors aren’t convinced the buying will speed up much. Traders on a prediction market put just a 5% chance on Strategy’s holdings passing one million BTC by the end of the year. At 250 coins a week, it would need more than 151,000 BTC in about 11 weeks to get there.
